Sunday, December 18, 2016

Long
before the invention of coins, the earliest written legal codes take for
granted the existence of commodity money that served both as a medium for
paying fines and compensation and as a unit of account and standard of value
assessing such penalties. The rules throughout the Sumerian “Code” of Ur-Nammu [1],c.
2100–2050 BC. (about 1400 years before the invention of coinage), show us that standard weights of silver were
being used as a unit of account and the actual medium of payment: the code
specifically requires defendants adjudged guilty to “weigh and deliver” the
specified weight of silver. Over half of the extant rules specify fine or
damage payments in silver. The single rule specifying a silver payment that
allows an alternative medium to be used calls it out as such: it specifies “he
shall bring [a slave woman], if he has no slave woman, he shall instead weigh
and deliver 10 shekels of silver; if he has no silver, he shall give him
whatever of value he has.” (Law 24).

“In Mesopotamia, the
adoption of a silver standard that equated measures of barley with a set amount
of silver is illustrated by a rare example of a spiral coil of silver, lengths
of which were snipped off to pay debts.” Given a standard cross-section, equal
lengths of wire gave equal weights of metal. Coils could be audited by snipping
them at random points inspecting the cut section. [Link]

A medium for paying fines and damages
implies that the recipient (for example the king for a fine, or the victim for
compensation) could use that medium in further useful payments – likely for
inheritance, tax, religious tithe, tribute, and exchange, among other
transactions. (These transactions, and how money emerges from them, will be
discussed in future posts). Indeed, the frequency with which a an intermediate
good is used as a medium for paying legal penalties may serve as a useful proxy
for how much value that good adds (i.e. how much in transaction costs its
saves) to other transactions (including but not limited to legal penalties)
involved in the circulation of that good.

Penalty

Frequency

Weigh
and deliver weight of silver

19

Death

4

Defining
state of slavery

2

Return
of same or similar (measure and deliver volume of grain for injury involving
grain)

2

Variable
damages

2

Misc.

2

Unknown
or no compensation

6

Frequency of penalties in the “Code” of
Ur-Namma [1]

An Indo-European example: the Old
Hittite laws

Penalty

Frequency

Weight
of silver

71

Number
of slaves

10

Enslavement

4

Death

11

Volume
of barley

6

Return
objects in same or similar form as item(s) found or stolen

40

Storable
food (sheep, bread, and beer)

3

Sheep

7

Land

4

Estate
division (land, slaves, livestock)

5

Variable
damages

10

Misc.

7

Unknown
or no compensation

18

Frequency of penalties in the Old
Hittite Laws (c. 1650-1500 BC: still over 800 years before the invention of
coinage) [2]

The ubiquity and deep age of compensation culture [3]

Institutions of
blood money and compensation via standard forms of wealth for other injuries have
been observed and recorded by missionaries, traders, and ethnologists in every
branch of humans, including all major divisions of humans that left Africa as
well as many who stayed. It is possible that this ubiquitous geographical scope
reflects a shared cultural influence that is more recent than our shared
ancestry in Africa (c. 70,000 BC) but prior to Columbus and Magellan. More
likely, it reflects a common cultural and genetic heritage dating back to at
least 70,000 BC before the exit of the ancestors of today’s Austronesian and
Eurasian peoples from Africa. This is also suggested by the deep age and
continuity of the shell bead tradition detailed here.
Shell beads were the predominant form of compensation money in cultures that
migrated out of the African and Eurasian core before the dawn of livestock
agriculture and metallurgy, to such diverse places as Melanesia and the
Americas. These patterns will be laid out in detail, from descriptions derived from traveler, missionary, and ethnographic literature, in future post(s).

Prior to the rise of efficient competitive markets, prices for goods
were often specified by custom or law rather than negotiated. This served to
conserve transaction costs in a high transaction cost culture where exchange
relationships resembled bilateral monopolies
more closely than they resembled spot markets.Bargaining costs were high, and indeed bargaining failure often resulted
in violence and destruction rather than merely in no deal. This made focal
points of negotiation, such as customary prices and customary compensation
amounts for specific injuries, a quite valuable and ubiquitous part of most
Neolithic and earlier cultures.When
specified by law, these rules setting prices were often intermingled with laws
specifying legal penalties and used the same set of units: in the Mesopotamian
and Anatolian law codes prior to coinage, most commonly weights of silver and
volumes of barley.

Price
unit

Frequency

Weight
of silver

68

Volume
of barley

6

Number
of sheep

7

Labor
or military service appurtenant to land

11

Other

1

Frequency of legally specified prices
and rents in the Old Hittite Laws [2]

One can also think blood-money-type fixed damages (compensation) and
fines as customary prices for injuries. As with customary prices for goods,
customary prices for injuries conserved on the transaction costs of bilateral
monopoly negotiations, in this case negotiations to settle legal disputes. Today
this is solved, to the extent it is, by each side predicting what damages or
punishments they expect a court to assess, and negotiating accordingly.

Copper spirals and gold discs, 4th millenium BC, Austria. Spiral armbands were among the earliest items worked from native copper,
in what are now Serbia and Hungary, c. 5000-4500 BC. [Link]

As kings and chiefs gained power, fines paid to them for criminal
acts replaced compensation to victims. In some cases a separate set of laws
(for example tort laws) arose alongside the criminal law, or was
evolved from the previous compensation culture, maintaining some compensation
for victims. Subsequently law usually evolved away from monetary compensation and towards punishments for deterrence.A chief
concern of criminal law became estimation of deterrence value. The king had
incentives to perform punishments both as a public good and a public show. To
allow themselves and their public to assess the deterrence value of punishments,
there were two major strategies:

·“Eye for an eye”-type laws, which focus on comparing the punishment
to the crime’s injury (often similar to the injury to maximize perceived
fairness, but sometimes also more severe than the injury for extra deterrence
value). In some of the non-silver compensation rules in the Mesopotamian and
Hittite law codes described above, barley, slaves, or other goods are
substituted for silver because in order to correspond to an injury involving
barley, slaves, etc.: like for like.

·Measured punishments, which, like monetary compensation for injury,
allow the severity of different crimes to be compared and ranked, for example

oWhipping (number
of lashes)

oPrison sentences
(length of time), our dominant modern form of criminal punishment

As suggested above (and for reasons to be explicated in future
posts), compensation according to a standard amount of a standard wealth good
(pre-coinage money), the outcome of coercive negotiations between clans, was
very likely the dominant form of measured punishment during the vast majority
of the time and in the vast majority of cultures from the dawn of our species
to today.

In
Northern Europe, blood money and other compensation for injury was known as
“wergeld”. If the guilty party didn't have the money on hand, they needed a money-lender.

Markets and the rise of variable damages

There was very little change between the Old Hittite Laws of (c.
1600 BC) and the New Hittite Laws (c. 1200 BC).But between then and the Roman Twelve Tables (c. 400BC) there was a
radical shift away from fixed fees and towards variable damages, assessed by
judge or jury. This evolution was coincident with the rise of coinage, probably
due to the shift of trade in a wide variety of goods away from bilateral and
hierarchical relationships and towards competitive marketplaces. Market deals were
facilitated by being able to transfer metal in branded form (coins) instead of
the cutting and weighing of coils or hack-silver or the laborious counting of
shells (or error-prone approximations by length) which had dominated exchange
up to that time. The lowering of negotiation costs by marketplaces, coins, and
other developments substantially decreased the use of customary prices in favor
of prices negotiated in a market.

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